Charter court clears government to proceed with 400bn-baht borrowing

The Constitutional Court ruled by a 7-2 majority today that the government's emergency decree, authorising the Ministry of Finance to borrow 400 billion baht to address the energy crisis and support Thailand's energy transition, is constitutional.

The court found that the emergency decree does not violate Section 172 of the Constitution, which governs the issuance of emergency decrees.

The ruling clears the way for the government to proceed immediately with projects under the decree and begin disbursing the funds in accordance with the approved procedures.

The case stemmed from a petition filed by 133 Members of Parliament—more than one-fifth of the members of the House of Representatives—who sought a ruling on whether the emergency decree complied with the Constitution. The petition was submitted through the Speaker of the House of Representatives.

The Anutin government has said that the first 200 billion baht of the borrowing will fund co-payments for around 30 million people, provide additional funding for the state welfare card programme for 13.4 million low-income citizens, and support the transport sector.

The remaining 200 billion baht will finance economic restructuring projects, including the transition to clean energy, improvements in labour productivity, and other initiatives.

The new borrowing is projected to push public debt close to 70% of gross domestic product (GDP), the revised fiscal discipline ceiling, up from the previous limit of 60%.

A higher level of public debt will reduce the government's fiscal flexibility in responding to future economic shocks.

Opposition lawmakers filed the petition with the Constitutional Court, arguing that the government had failed to provide sufficient details of the energy-transition projects to be financed through the emergency borrowing.

They asked the court to rule on whether the emergency decree violates the Constitution, arguing that the second 200-billion-baht tranche, earmarked for energy-transition projects, does not meet the constitutional requirement of an emergency and should instead be funded through the normal annual budget process.